Nikola founder says electric truck group remains ‘undervalued’

The founder of electric and hydrogen truck business Nikola has insisted the group is “undervalued”, despite the revenue-less company overtaking Hyundai and Fiat Chrysler in value within days of listing its shares.

The value of the company, which joined the public markets last week through a merger with a non-trading listed business, hit $28bn on Tuesday, even though it has yet to sell a single vehicle.

Nikola, which was founded in 2016 and has ambitious spending plans, aims to start generating revenues next year when full production of its hydrogen-powered class 8 semi-trailer truck begins. 

Its shares on Tuesday rose to $81, making the business worth $28bn, compared with Hyundai’s $26bn valuation and Fiat Chrysler’s $21bn. On Monday, it briefly overtook Ford’s $30bn valuation when shares touched $90.

The company, which merged with VectoIQ for the listing, intends to be profitable within “a year or two” of starting production, but founder Trevor Milton told the FT that its investors, which include ValueAct and Fidelity, had bought into a larger vision.

“These people [our investors] believe it’s more important to change the world than what your revenues are in the first year,” he said, adding the company “is undervalued right now” because of its potential to break into the highly lucrative pick-up truck segment.

His comments, and the company’s accelerating shares, will reignite debate over valuations of battery vehicle businesses that lag behind traditional auto manufacturers in profit and sales, but use social media to garner attention and build a fan base.

Nikola’s backdoor route to the stock market included raising more than $760m — three times what Tesla raised when it went public a decade ago. The group has also lost $188.5m over five years, according to filings.

It plans to begin production of its truck next year in Europe through a joint venture with CNH Industrial, the Italian group that owns the Iveco truck brand. It also holds a 7 per cent stake in Nikola.

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